Your Clients Will Jump Ship If You Don’t Start Using Reviews to Improve Customer Retention

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Improving customer retention should be one your biggest priorities. Reviews can help.

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Business is a lot like butter.

  1. Both involve churn.
  2. The metaphor breaks down after this.

But what is churn? In the business world, churn is when your customers leave you, and a high churn rate can spell disaster. One of your best weapons to combat it?

Your reviews.

Customer reviews are incredibly valuable assets for moving forward as a company. But making changes to your product or services based on reviews can take time, so how do you minimize churn while you make changes?

First, I’ll explain why churn is so bad for your company, then I’ll show you how reviews can help you fight it.

Churn means lost customers and double the work to recover

Straightforward customer loss isn’t the only impact churn has on your business. It also creates twice the amount of work to overcome that loss.

Let’s say you lose five customers to churn, who each spent $500/month. You think, at first, you need only acquire five new customers to replace those.

But let’s say the cost of acquisition for new customers is about $100 per customer. That means you need to recruit seven new customers to be doing even slightly better than you were before. Any fewer, and you’re operating at a loss.

Figure out what the numbers in this example look like when applied to your business to get a sense of how big a problem this can be for your company.

The challenge of identifying churn so you can improve customer retention

Churn can be hard to pinpoint.

Let’s say your product operates on a subscription basis. Even during periods where it seems like your company is growing, there could be a lot happening under the surface that—without proper monitoring—you don’t even notice.

Look at the graph below, detailing the growth and churn in a fictional company. If you only look at the total number of clients, you’d think this company was growing:

an example graph showing customer churn and growth

To a certain extent that’s true. But the rate of growth is severely hindered by the fact that businesses are continually canceling their subscriptions. Between January and February, the number of January subscribers almost halves.

That’s what churn looks like for a company with month-to-month subscriptions: stilted growth.

The longer the duration of your client contracts, though, the more difficult it is to measure (and therefore address) churn. If your subscriptions last a year instead of a month, you’ll have fewer data points to analyze when businesses are moving on from your product.

3 ways to use customer reviews to flesh out your data around churn

When data points are scarce, it becomes vital to measure customer engagement and customer satisfaction and to gain an overall sense of just how well your product meets customer needs.

How do you do all of that? Using the reviews your customers leave, both positive and negative, to make changes.

1. Use positive reviews to bolster customer engagement and buy-in

Your positive reviewers have already left a favorable review at least once. Give them a reason and a platform to do it again, only louder, by turning them into brand ambassadors. This way, they’ll feel more engaged and valued by your company while helping generate new leads.

You can (and should) keep your clients informed of any changes you’re planning on making to your product, and gauge their reactions accordingly.

Another use for positive reviews? As content on social media, software directories (like Capterra), and other promotional material.

2. Use negative reviews to find and address pain points

No one likes to get negative reviews, but not liking them doesn’t mean they’re without value. Negative reviews are your customers indicating why they’d leave you.

To combat churn, start combing through your reviews (whether manually or with a reviews insights tool) to find broader trends.

Then, sort those trends into the following categories:

  • Functionality
  • Ease-of-use
  • Customer support
  • Value for money

These categories, while broad, cover a wide array of topics that matter to your customers. They address what your product can do, the challenges users face, how you respond to those challenges, and if your buyers think that your product is worth their investment.

There are other categories you can use, but these buckets are a great place to start to get a strong sense of where your problems lie.

3. Focus on engagement to retain customers while you make changes

All changes take time. To keep customers involved and invested while you implement changes driven by their reviews, you need to keep them engaged.

Respond to every review personally, with direct follow-up questions to help contextualize the review.

Try to pinpoint as many specifics as possible:

  • What is the reviewer’s role in their company?
  • What industry do they work in?
  • What do they use your product for?
  • How long have they been a customer?
  • How often do they use your product?

The more specific you get, the more your customers will feel like you’re paying attention to them, and the more likely they are to stay with you while you make the changes.

Another option? Include customers while you move through the process of change implementation.

Share updates on where you are with the changes, offering concrete timelines and perhaps fiscal incentives to stay until you implement those changes. You can even go a step further and bring customers on board to work through potential solutions as part of your customer advocacy team (if you’ve got one).

The most important thing is that you define what engagement looks like for you and your customers, and implement a plan to make it happen.

What else can reviews help your business with?

If you’re not impressed by the mighty power of reviews now, check out these articles to learn more about the ways reviews can help your business:

Looking for Customer Loyalty software? Check out Capterra's list of the best Customer Loyalty software solutions.

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About the Author

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Adam Rosenthal

Adam Rosenthal is a Senior Specialist Analyst covering Vendor Marketing. He received his Masters from the University of Chicago and worked on several TV shows you might have heard of.

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